Online sales tax might have to stand on its own

Key lawmakers are warning the potential success of an online sales tax might lie in keeping it separate from comprehensive tax reform.

“If we meld this in to … ‘tax reform,’ there’s a lot of apprehension about whether it’s going to be a tax grab,” Rep. Peter Welch (D-VT), Marketplace Fairness Act co-sponsor and a House Commerce Committee member, said at the POLITICO Pro Technology Deep Dive. House Ways and Means Committee member Rep. Aaron Schock (R-IL) agreed. “I do not believe, at the end of the day, it is going to be a part of a tax reform bill because it’s not a part of the Tax Code,” he said. The latest incarnation of the Marketplace Fairness Act received broad bipartisan support when it was introduced in the House and Senate last month. Twenty senators and 37 House members immediately signed on to the bill, which would allow states to ensure online merchants collect sales tax in return for simplified tax procedures. The bill’s similarity this time around will help with passage, said co-sponsor Rep. Steve Womack (R-AR). But he challenged the notion that it would pass on its own. “The political reality is you may have to stick it in comprehensive reform,” he said. “We need to fix the problem. It’s a loophole that’s getting bigger and bigger.”